Suckers for Chance: Why We Keep Betting Even When the Chips Are Down

I had a funny thing happen to me the other day. I was in Las Vegas playing baccarat. Turns out that the game is really simple: there is no skill to it and all you have to do is flip the cards over and pretend to be lucky. I was having a hell of a time with it, great fun and even greater luck, and ended up with a pile of chips on my table.  Here’s the funny thing: I was annoyed because I expected to lose.

Even though I pretty much always lose, I love gambling. The energy and noise of a crowded table, the bright colors of the chips, the sound of the dice hitting the back of the craps table, the cackling of the roulette ball as it bounces around the wheel. Even the carnival lights of the slot machines have been known to pull me in a time or two. And while I don’t routinely buy lotto tickets or scratch offs, I’ve been known to pick up PowerBall tickets for friends when the jackpot gets obscenely high, and nothing gets me running for a penny faster than a gift of a scratch off. 

I’m a smart enough guy. I know that, over a lifetime, I’m going to lose a lot more money than I’ll ever win. I know that overstimulation, like the kind intentionally created in casinos, causes humans to make bad decisions. But even armed with that knowledge, it’s hard to resist just one more hand, one more roll, one more spin. This is especially true if I’ve had a run of bad luck. Bad luck has to turn around eventually, right? 

Wrong. Not just a little wrong, but disastrously wrong. A large group of gamblers at the famous Monte Carlo Casino found this out the hard way on August 18, 1913. It was a typical day at the roulette table until the ball started landing on black and didn’t stop. First five black numbers in a row, then 10, then 15. The excitement and the crowd grew as everyone bet on red, sure that after so many black numbers, a red must be coming up. But they kept losing money as the string of black numbers grew to 20, then 25. You can imagine the groaning and cursing as the crowd reached into their pockets to bet again and again. But the ball landed on black 26 times in a row. By the 27thtime, when red finally hit, the gamblers were out millions of francs, and one winning bet on red wasn’t nearly enough to make up for the previous losses. 

You’re not alone if you read this and feel sorry for the gamblers, assuming how crazy it is that black hit 26 times in a row. But here’s the thing, the probability of black hitting again is exactly the same as any other combination, and, like flipping a coin, the probability of the 26th play landing on red is exactly the same is it landing on black. The probability of a gamble does not change because of the events that preceded it. 

Think of it this way: you flip a coin five times and it lands on tails every time. What are the odds that on the 6thtoss, it lands on tails again? Our brains automatically think that the odds of getting six tails in a row must be low, so we bet on heads. But this is a classic gambler’s fallacy (sometimes called the Monte Carlo fallacy). The chance of the 6thtoss being heads is still 1 out of 2, the same chance as it being tails. Even if you look at the sequence, the odds are the same. The probability of 6 coins landing T-T-T-T-T-T is 1/64, the exact same probability as landing T-T-T-T-T-H.  

Why is this so hard to wrap our brains around? 

The reason is that our brains don’t deal in probabilities; we deal in frequencies of events. Back in the wild, as we were evolving, probabilities were largely irrelevant. But frequency was the difference between life and death. If you saw seven elk die after drinking from a lake, you didn’t need to analyze the probability that the water might kill you. So we evolved with frequency radars, much like bats evolved with sonar. We use that frequency to see into the dark crevices of data and make gut decisions. That is a key reason why we survived the wild, but it eats us alive in the daily grind of civilization.

As a result, the brain has trouble making sense of long odds. A number like one out of ten is pretty easy for us to understand, and maybe we can even fathom one in a hundred. But the odds of winning the Powerball are about 1 in 175,000,000. We simply can’t compute or comprehend numbers like this. So we anchor on something we can understand and focus on the “1”: one person will win, and it could be me! This is why most of us irrationally prefer to take longer odds on a higher value than to make safer bets on smaller values. 

So how do we give ourselves a fighting chance? To overcome gambler’s fallacy, think carefully about whether the next event is independent or linked to the previous ones. Just because an airplane got struck by lightning and crashed last week doesn’t mean airplanes are any less safe, nor does it mean they are safer because “lightning doesn’t strike twice.” If you are winning at craps, leave, not because the streak is likely going to end, but because the odds are against you in general. 

You may reason that after decades of playing the lotto and losing, surely you’re “due” for a win. Or maybe you were a lucky winner already, so surely you, of all people, can win again. That’s the same fallacy at work. Any time you consider placing a bet or buying a ticket, make sure you’re thinking only of the odds of that particular play. Discard all past experience. 

That brings us back to my Vegas story and why I was so unhappy about winning. I go to the casino to lose, not to win. I have worked hard to train my brain that gambling doesn’t pay and that the odds are always against me. I am really good at it, too! I lose well and I lose often, but I love gambling so I look at it as pure entertainment. Fun, exciting, but a losing proposition. A winning streak, ironically, is not good for me. To win is to reinforce my natural tendency to believe I should win. So I was pissed that day, and spent the rest of the evening pissing away my winnings (some for fun, some for charity). 

Note: A version of this article was first published in USA Today, but because of the importance of the subject matter, we felt it was worth including on Linkedin, where we tend to get more feedback and a lively discussion.